South Florida's most corrupt hospital district is at it again, compromising health care to reward a crony

You may have never heard of Dr. Steven M. Scott, but chances are he's taken some of your money. A huge financier of the Republican Party, Scott owns an HMO that covers some 385,000 people in Broward and Miami-Dade counties and, until last month, provided physicians to more than 200 hospitals in 28 states. His most lucrative deal is with the tax-subsidized North Broward Hospital District, which has contracts with Scott worth $50 million.

The doctor also happens to be a disaster in the making, the Ken Lay of health care, right down to his connections to the Bush family. He's been accused of fraud in numerous lawsuits and has run his company, PhyAmerica, into the ground, looting its assets and engaging in shady and reckless business practices that have left it more than $400 million in debt, according to court records.

Even as his company fell apart and went bankrupt, he collected a $2.2 million salary, kept two eight-passenger jets, and bought, with his wife, three houses in Boca Raton worth about $10 million. Scott resigned last month -- but not before quietly giving himself a $200,000 bonus and cashing out $400,000 in corporate life insurance policies, according to Stephen Dresnick, the Miami doctor and businessman who is buying the company's remaining assets.

Colby Katz

Bag Man Bill (left)

I could go on about the man's shenanigans, which date back more than a decade and are so myriad and complicated that it would take a book to properly describe them. But all of his problems didn't stop the hospital district, which operates four public hospitals and numerous clinics, from renewing his $50 million deal last month. It's not really surprising considering the fact that Scott finances the greed-driven Jeb Bush political machine that runs the district and has some of the district's most powerful players on his payroll. Before we look at the corrupt crowd, let's examine the shameless and damaging deal.

On December 11, just nine days after Scott resigned in disgrace from PhyAmerica, district CEO Wil Trower signed contracts with brand-new, Scott-owned companies to provide ER, ob-gyn, and pediatric doctors to NBHD.

The problem: None of the new companies had any doctors to supply. So Scott simply raided his old company, PhyAmerica, by stealthily signing agreements with its 80 ER physicians. The underhanded move was a blatant violation of Scott's court-ordered agreement not to compete with PhyAmerica, and it enraged Dresnick, the new owner, and PhyAmerica's creditors, who were being robbed of yet more assets. Last week, bankruptcy Judge E. Stephen Derby found Scott in contempt of court for his double-dealings. But that hasn't stopped the doctor; the case will likely drag out for months. "To hell with morals and ethics -- Scott is off stealing the assets back," Dresnick says.

While ER service hasn't been disrupted (yet), a crisis is brewing on the ob-gyn side. In addition to the ER staff, Scott tried to pilfer the 14 doctors and eight midwives from SunLife Ob/Gyn Services, the PhyAmerica subsidiary that provided staff for Broward General Medical Center and the Seventh Avenue Family Health Center in Fort Lauderdale. When those physicians refused Scott's nefarious overtures, he was left with no staffing and no way to fulfill the contract, which took effect on January 1.

Fortunately, SunLife, which could have left the district in chaos and many expectant mothers in the lurch, continued supplying some doctors for urgent care at its own cost. Some service to pregnant patients has been disrupted, however, and SunLife CEO Tom Lowe notified Trower in a January 16 letter that his company would stop all service on February 1.

Now Scott, who refused to comment for this column, is scrambling to hire obstetricians and midwives, running ads in the Sun-Sentinel and on the Internet. "The district is in for a crisis," Dresnick says. "Who is going to deliver babies at the end of the month?"

Trower refused to comment on the matter, as did other district officials, including Broward General's medical chief of staff, Richard Callari. No wonder. The district has jeopardized the health of expectant mothers and awarded an ob/gyn contract -- worth about $11 million -- to a company that, for all practical purposes, didn't exist. So much for due diligence, patients' well-being, and protecting the taxpayers' money.

If all of this sounds so outrageous as to defy reason, it's because the North Broward Hospital District, which collects about $160 million in property taxes, doesn't run on common sense -- it's driven by cold, hard cash. And the shameful money trail in this case leads right to the governor's mansion. While there is no evidence that Jeb Bush played any direct role in the Scott contract, his money-driven political machine, which has the district in its icy grip, made sure it happened.

Scott is the colonel of the operation, the godfather of grift. He's one of the state Republican Party's largest donors. I did an analysis of his contributions to state candidates and committees and found that he's contributed more than $550,000 since 1995, and that doesn't count the hundreds of thousands of dollars he's given to federal and local politicians. About $330,000 has gone directly to the Republican Party and $35,000 to Jeb Bush campaigns and interests.

He's also greased the district's wheels, pledging $500,000 last August to the NBHD Charitable Foundation, which is raising funds for Broward General's expansion. So far, he's paid $25,000 of that loaded gift.

A key lieutenant in the racket is NBHD General Counsel Bill Scherer, whose law firm rakes in nearly $3 million a year from the district and doles out another $2.5 million in legal contracts. Scherer is not only on the public dole -- he's also on Scott's payroll, representing the doctor's companies in legal disputes. "Bill Scherer is one of the most disgusting things going on at [the district]," Dresnick says. "He has no business being anywhere near that place."

Scherer is also one of Jeb Bush's chief bag men in Broward County. He's raised hundreds of thousands of dollars for the governor. During the past five years, Scherer and his law firm have directly given nearly $70,000 to the Republican Party and Bush. Scherer, who is on the governor-appointed Judicial Nominating Commission, has also been named a "ranger" for George W. Bush for raising more than $100,000 for the president. "Bag Man Bill" also served as campaign counsel for the president during the 2000 election recount, during which elections officials threatened to kick him out of the Broward Courthouse after he began screaming about chads.

Scherer wouldn't comment for this story, but a rep from his PR service, Boyd and Powers (which also contracts with the district), says he hired another lawyer, Samuel Ullman, so that he wouldn't have a conflict of interest.

Despite the lawyer's shell game, the fact remains that Scherer is the behind-the-scenes power in the district, and if he didn't want the Scott contract to go through, it wouldn't have.

Another lieutenant in the Bush ring is powerful lobbyist Jim Blosser, whose law firm -- Poole, McKinley, and Blosser -- collects $72,000 a year from NBHD to lobby the Republican Legislature. In another clear conflict of interest, he also lobbies the district for numerous clients, including Dr. Steven M. Scott's companies.

Blosser, who began his ascent to power working for billionaire/civic vampire Wayne Huizenga, is also a presidential ranger. My count shows that Blosser and his law firms and partners have given roughly $56,000 to the governor and the Republican Party since 1998. He also served as a campaign officer for both the governor and the president. Jeb rewarded him by appointing his wife, Nancy, to Florida Atlantic University's Board of Trustees.

Just last September, Blosser and Scherer organized President Bush's fundraiser at Pier 66 in Fort Lauderdale. The two lieutenants also share mutual financial concerns. Both have worked for Huizenga, both represent the developers for the rejected Palazzo project in a lawsuit against the City of Fort Lauderdale, and both serve as directors of Levitt Corp., the giant housing developer. And of course, both collect money from Scott and the NBHD.

These are ties that bind.

Next, we have the soldiers, those whose job it is to carry out the will of Scott's boys. That would include district CEO Trower, a glorified clerk who began working for the district 30 years ago as a respiratory therapist. The secret to his success: Trower is a good, useful tool. He does as he's told.

And then there are the seven Bush-appointed commissioners themselves, who operate as a rubber stamp for the political interests. Among them are Gul Cumber, whose son formerly worked at Blosser's firm, and Steven Berrard, another Huizenga flunky and close Scherer associate.

This giant incestuous mess of mutual interests has nothing -- not a damn thing -- to do with providing quality healthcare to the uninsured, which is supposedly the district's raison d'être.

It's really about lining pockets on the public's back (again this year, the board voted to raise our taxes). Consider that last week, during an obscure NBHD building and finance committee meeting, Scherer urged the board to raise Trower's salary from $404,000 to $600,000. Only one member of the public, activist Jane Kreimer, was there to witness the vote to approve the 50 percent pay hike.

Let's see, a bad CEO takes obscene raises while his organization is run into the ground. Where have you heard that one before?